Exhibit 10.6


 


TRANSITION
AGREEMENT


 


THIS TRANSITION AGREEMENT (“Agreement”)
is made and entered into by and between AGA Medical Corporation, a Minnesota
corporation (“Company”) and Franck L. Gougeon, residing at 4729 Annaway
Drive, Edina, Minnesota 55436 (“Executive”), as of this 20th day of
June, 2008.


 


WHEREAS, the Executive is a
founder of the Company and has served as a member of the Company’s board of
directors since the Company’s inception;


 


WHEREAS, the Executive is
currently employed by the Company and entered into that certain Employment
Agreement with the Company effective as of July 28, 2005, and that certain
Amended and Restated Employment Agreement with the Company effective as of April 21,
2008 (collectively “Employment Agreements”); and


 


WHEREAS, the Company and the
Executive desire to provide for the orderly transition of a new President and
CEO for the Company in connection with the filing of an initial public offering
and to recognize the extraordinary service of Executive to the Company.


 


NOW, THEREFORE, in
consideration of the mutual promises, terms, provisions and conditions set
forth in this Agreement, the parties hereby agree as follows:


 


1.             New Role.  Executive’s employment and Employment
Agreements with the Company shall terminate and Executive’s Consulting Agreement
with the Company shall commence, effective as of the date of filing of a Form S-1
Registration Statement of the Company with the Securities and Exchange
Commission (“Transition Date”).  From and
after the Transition Date, Executive will have the title of Director and
Co-Founder.


 


2.             Special Bonus.  In
appreciation for the extraordinary service of the Executive, the Company will
pay Executive a one-time special bonus in the amount of Five Hundred Thousand
and No/100 Dollars ($500,000.00) to be paid on the Transition Date. Upon
the Transition Date, the Company will also pay Executive a lump-sum equal to Executive’s
accrued but unused vacation pay up to the Transition Date.  The payments hereunder shall be subject to
W-2 withholding and shall not be eligible for deduction for contribution toward
Executive’s 401(k) plan.


 


3.             Benefit Continuation.  Executive shall be entitled to coverage under
all existing health, medical, hospitalization and dental insurance provided by the
Company’s group coverage through the Transition Date.  Thereafter, the Company shall pay for COBRA
insurance continuation coverage elected by Executive for a period of 18 months
following the Transition Date.


 


4.             Company
General Release.  The Company hereby
releases Executive, and Executive’s heirs, executors and assigns, whether
personally or in Executive’s official capacity, from any and all charges,
claims, demands, or causes of action, which the Company has made, could have
made, or may make, whether asserted or unasserted, known or unknown, arising
out of Executive’s job performance, employment, and separation of employment
with the Company,


 


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whether such
charges, claims, or causes of action are or may have been brought under
federal, state or local statutory or common law.  This release expressly includes, without
limiting the generality of the foregoing, any claims for penalties, punitive
damages, or attorneys’ fees or costs by the Company or its attorneys.


 


The foregoing
release shall not apply to (i) the Company’s right to enforce the terms of
this Agreement or seek remedy for the breach thereof; and (ii) all of the
Company’s rights under any other agreements to which Executive and Company are
party (except solely the Amended and Restated Employment Agreement dated April 21,
2008, which terminates on the Transition Date), including, without limitation,
that certain Amended and Restated Stockholders Agreement dated April 21,
2008, and that certain Amended and Restated Registration Rights Agreement dated
April 21, 2008.  In addition to the
foregoing, the Company covenants and agrees that the Company will not raise or
in any way pursue any claims that are being released and discharged herein in
any forum of any kind, including federal, state or local courts, departments,
agencies or offices of any kind, whether administrative, regulatory, judicial,
quasi judicial or otherwise.


 


5.             Executive
General Release.  Executive hereby
releases the Company, its directors, owners, shareholders, officers, employees,
independent contractors, agents and assigns, whether personally or in their
official capacities, and all parent, subsidiary and affiliated entities, from
any and all charges, claims, demands, or causes of action, which Executive has
made, could have made, or may make, whether asserted or unasserted, known or
unknown arising out of Executive’s job performance, employment, and separation
of employment with the Company, whether such charges, claims, or causes of
action are or may have been brought under federal, state or local statutory or
common law  This release expressly
includes, without limiting the generality of the foregoing, any claims for
penalties, punitive damages, or attorneys’ fees or costs by Executive or his
attorneys.


 


The foregoing
release shall not apply to the following: (i) Executive’s right to enforce
the terms of this Agreement or seek remedy for the breach thereof; (ii) Executive’s
rights under COBRA; or (iii) Executive’s ongoing rights with respect to
any deposits made by him prior to his last day of employment in the Company’s
401(k) plan or with respect to the Company’s matching contributions made
for his account in accordance with such plan that vest on or before the
Transition Date; (iv)  all of Executive’s rights under any other
agreements to which Executive and Company are party (except solely the Amended
and Restated Employment Agreement dated April 21, 2008, which terminates
on the Transition Date), including, without limitation, that certain Amended
and Restated Stockholders Agreement dated April 21, 2008, and that certain
Amended and Restated Registration Rights Agreement dated April 21, 2008;
and (v) all of Executive’s rights to indemnification by the Company as an
officer and director of the Company for periods prior to the date hereof.  In addition to the foregoing, Executive
covenants and agrees that Executive will not raise or in any way pursue any
claims that are being released and discharged herein in any forum of any kind,
including federal, state or local courts, departments, agencies or offices of
any kind, whether administrative, regulatory, judicial, quasi judicial or
otherwise.


 


6.             Severability
and Judicial Modification.  If any
portion of this Agreement is adjudicated to be invalid or unenforceable, then
this Agreement shall be deemed amended to delete that portion thus adjudicated
to be invalid or unenforceable.  If any
provision of this Agreement is deemed unenforceable by virtue of its scope or
limitation, the parties agree that a


 


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court shall modify
such a provision to the extent necessary to render it enforceable to the
fullest extent permissible under applicable law.


 


7.             Entire
Agreement, Consideration and Merger. 
This Agreement constitutes the entire agreement between the parties with
respect to the termination of Executive’s employment relationship, and the
parties agree that there were no inducements or representations leading to the
execution of this Agreement, except as contained in this Agreement.  Executive acknowledges that the terms and conditions
stated herein constitute adequate consideration for this Agreement. Except as
otherwise set forth herein, this Agreement supersedes all prior oral and
written agreements and communications between the parties.


 


8.             Heirs,
Successors and Assigns; Beneficiaries. 
This Agreement shall be binding upon Executive and upon Executive’s
heirs, administrators, representatives, executors, successors, and assigns, and
upon the Company’s successors and assigns.  Executive agrees that the parent, subsidiary
and affiliated entities of the Company are intended third party beneficiaries
of this Agreement and all of the terms, conditions and releases set forth
herein and that any or all of such third party beneficiaries may take such any
actions directly in their respective names to enforce the terms herein.


 


9.             Jurisdiction,
Venue and Governing Law.  Any action
arising out of or relating to this Agreement shall be brought only in Hennepin
County District Court or the United States District Court of Minnesota.  Executive hereby consents to and waives any
objection to venue and personal jurisdiction in any such action relating to or
arising out of this Agreement.  This
Agreement shall be governed by the internal laws of the State of Minnesota.


 


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IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed as of the date set forth above.


 


 


	
  Dated:

  	
   6-20-08      

  	
   

  	
  /s/ Franck L. Gougeon

  
	
   

  	
   

  	
  Franck L.
  Gougeon

  



 


 


	
   

  	
   

  	
  AGA MEDICAL CORPORATION

  



 


 


	
  Dated 

  	
  6-19-08

  	
   

  	
  By: 

  	
  /s/ Ronald E.
  Lund

  
	
   

  	
   

  	
   

  	
  Ronald Lund

  
	
   

  	
   

  	
  Its: General Counsel and Secretary

  



 


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